Giving up the day job

masonic

bongoali wrote: »

Can I have a show of hands of those who have given up their job to dedicate their time in full time study learning how to invest and are now living off that income?

The learning must come first, but you could do that in a weekend if pushed. Once you have learned how to invest, if it is taking more than a few hours of your time a month you are doing something wrong.

ChesterDog

I have done very, very nicely from investments, having retired over a decade ago at 43.

However, I did even better in business first. That set me up for this 'second career'.

I wouldn't have risked earning a living from investing without having installed that big safety net first.

Broken_Biscuits

ChesterDog wrote: »

I have done very, very nicely from investments, having retired over a decade ago at 43.

However, I did even better in business first. That set me up for this 'second career'.

I wouldn't have risked earning a living from investing without having installed that big safety net first.

When you retired at 43, what percentage did you need your investments to return to stop you touching capital? Do you work on a 4% rule or less?

I'm interested as have plans/hopes of early retirement.

You would have to be very wealthy/frugal/willing to take risk to start a 40 to 60 year retirement if the 4% SWR does not work.

Ifts

Broken_Biscuits wrote: »

I'm interested as have plans/hopes of early retirement.

I saw this over on RIT's blog a few weeks ago, that may be of interest:

http://www.retirementinvestingtoday.com/2016/07/maximising-withdrawal-rates-in.html

ChesterDog

Broken_Biscuits wrote: »

When you retired at 43, what percentage did you need your investments to return to stop you touching capital? Do you work on a 4% rule or less?

I'm interested as have plans/hopes of early retirement.

You would have to be very wealthy/frugal/willing to take risk to start a 40 to 60 year retirement if the 4% SWR does not work.

It wasn't planned that carefully.

The situation was that my wife developed a progressive disabling condition (MS) and as we looked at our options, we realised we - probably - had enough equity in the business (£600k) to consider just selling it and walking away.

Of course, interest rates were a lot healthier then.

Not for long though. No sooner had we begun to adjust than the financial crisis hit, interest rates plunged and we were faced with a rather large problem as a result. So investing - which had been a hobby - became a serious business.

One way or another, I estimate the crisis knocked about £200k off our net worth. But we are used to being up against it - our business struggled terribly for the first few years, and we know all about life's unexpected problems - so we just knuckled down and got on with it.

I claim no flair for investing - I just use well-established principles - but I am very good at sticking to those principles and that has netted us performance which averages something close to 20% per year.

With occasional exceptions, we never spend more than we earn. That is how we have always been. It has saved us (more than once) and, ultimately, made us, as we are now north of £1.5m and finally feeling financially secure.

But as you can see, safe withdrawal rates were not really considered. We never wanted to see our capital decrease (and still don't) so it was all about earning enough income to live reasonably comfortably within.

Ray_Singh-Blue

bongoali wrote: »

Can I have a show of hands of those who have given up their job to dedicate their time in full time study learning how to invest and are now living off that income?

You could probably draw a diagram with the different circles.
1) those who have given up their job.
2) those who are living off investment income.
3) those who studied full time to learn how to do it.

Circle 1 would be big. Circle 2 would be smaller and pretty much contained within circle 1. But I expect circle 3 would be very small?

bigadaj

One version of doing this is effectively early retirement. And managing a pot of money.

The problem for the OP is that he presumably doesn't have half a million or so to start with excluding his house, if he did so then it would be possible to generate enough to get by on.

Not too much study required, it's getting the sum to drawdown from that's the problem, most easily accessed for most from a job.

sharpe106

To start from nothing unless you have pretty much zero overheads, the chances are you are never going to make enough to live without making risky trades which if you do that you might as well go to the casino and bet on red or black.